Polen Capital, an investment management company, released its “Polen Global SMID Company Growth” third quarter 2024 investor letter. A copy of the letter can be downloaded here. In the third quarter, the fund returned 7.41 (gross) and 7.40% (net) compared to a 9.37% return for the MSCI ACWI SMID Net Index. Negative stock selection and sector and country allocation led the portfolio to underperform in the quarter. Despite volatile market sentiments, global small and mid-cap equities posted gains in the third quarter. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Polen Global SMID Company Growth highlighted stocks like Five Below, Inc. (NASDAQ:FIVE), in the third quarter 2024 investor letter. Five Below, Inc. (NASDAQ:FIVE) is a US-based specialty value retailer. The one-month return of Five Below, Inc. (NASDAQ:FIVE) was -6.72%, and its shares lost 56.49% of their value over the last 52 weeks. On November 20, 2024, Five Below, Inc. (NASDAQ:FIVE) stock closed at $83.10 per share with a market capitalization of $4.571 billion.
Polen Global SMID Company Growth stated the following regarding Five Below, Inc. (NASDAQ:FIVE) in its Q3 2024 investor letter:
“We exited our position in Five Below, Inc. (NASDAQ:FIVE), the dollar store concept for tweens and teens. The business has struggled fundamentally with weaker consumer spending and lower margins, partially due to a problem with shrink (shoplifting). While many companies struggle with elevated shrink, Five Below’s problems were compounded by. a large investment in self-checkout, which made matters worse. The issue was in the process of being fixed, but the company was further hampered by growing pressure on consumers. We believe these issues may prove temporary but were surprised when the CEO was terminated. For now, we prefer to wait on the sidelines to ensure we fully understand the extent of the issues and how the CEO transition plays out.”
A family happily shopping for everyday items in a specialty retail store.
Five Below, Inc. (NASDAQ:FIVE) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 36 hedge fund portfolios held Five Below, Inc. (NASDAQ:FIVE) at the end of the third quarter which was 31 in the previous quarter. While we acknowledge the potential of Five Below, Inc. (NASDAQ:FIVE) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed Five Below, Inc. (NASDAQ:FIVE) and shared ClearBridge Mid Cap Strategy’s views on the company. In the previous quarter, Polen U.S. SMID Company Growth Strategy shared its optimistic views on Five Below, Inc.’s (NASDAQ:FIVE) long-term growth potential. In addition, please check out our hedge fund investor letters Q3 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.